Trump's pick to run consumer watchdog faces skeptical Senate

By:
KEN SWEET, AP Business Writer

Updated: Jul 19, 2018 - 3:58 PM

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Trump's pick to run consumer watchdog faces skeptical Senate

WASHINGTON (AP) - President Trump's nominee to take over the nation's consumer watchdog agency exasperated some Democrats with vague answers at a Senate hearing Thursday, but Kathy Kraninger appears to be on her way to getting confirmed later this year.

Republicans hold a 51-seat Republican majority in the Senate, so Kraninger's confirmation seems all but certain.

Trump nominated Kraninger on June 18 to replace Mick Mulvaney, who has been acting director of the Consumer Financial Protection Bureau since late November. Mulvaney also runs the Office of Management and Budget, where Kraninger currently works. She oversees roughly $250 billion in spending on federal government programs.

Democrats who've questioned Kraninger's qualifications to lead the CFPB since her nomination pressed her Thursday on her lack of experience in banking or financial services, as well as issues such as payday lending and enforcement actions against financial institutions. Under Mulvaney, the agency has taken a more business-friendly approach and Democrats assume Kraninger will do the same.

Kraninger appeared non-committal on various issues raised by senators on both sides of the aisle. Republicans seemed nonplussed but Democrats grew frustrated.

"You got the votes to lead the agency," said Sen. Jon Tester, D- Montana, referring to Republican control of the Senate and the fact that Democrats cannot filibuster the nomination. "It would be really helpful to know where you're at."

"I am trying to get an answer from you, and I just can't. It's maddening," said Sen. Brian Schatz, D-Hawaii.

Kraninger did not appear to win the support of any Democrats on the committee with her testimony, nor did she appear to frustrate Republicans, so the final vote to move her nomination out of committee could fall along party lines. It would then go in front of the full Senate later this year.

Some Democrats focused their line of questioning on Kraninger's experience in the White House's budget office, particularly since the office is in charge of moving government funds around to implement policies.

Sen. Elizabeth Warren, D-Massachusetts, focused most of her questioning on Kraninger's role in implementing and setting the Trump administration's policy of separating children from their parents who crossed the border illegally. In her current job at the White House, Kraninger oversaw budget requests at the Department of Homeland Security and other government agencies. The DHS is responsible for implementing the administration's immigration policies.

Warren asked for Kraninger's opinion on the Trump child separation policy, and Kraninger replied, "It is not appropriate to give my opinion" and did not give a clear answer on what role she may have played in the policy.

Warren took the non-answer as a signal that she was involved in some way.

"You were part of it. It is moral stain that will follow you for the rest of your life," Warren said.

The OMB also has oversight of funding proposals for the White House's response to disasters like Hurricane Maria in Puerto Rico. The administration has been criticized for not doing enough to help Puerto Rico recover following the devastating storm.

"(Your work at OMB) does not give me faith that when you have to stand up for seniors, service members, students, homeowners against some of the biggest financial institutions in this country that you'll do that," said Sen. Bob Menendez, D-New Jersey. "If you couldn't do it for the people of Puerto Rico, I don't know how you're going to do it for anybody else."

The White House and Republicans argue that Kraninger's experience at the OMB, arranging programs for large government departments like Homeland Security and the Federal Reserve, makes her qualified as a manager for a large government bureau.

"Given her depth and diversity of public service experience, I have the utmost confidence that she is well-prepared to lead the Bureau in enforcing federal consumer financial laws and protecting consumers in the financial marketplace," said Sen. Mike Crapo, R-Idaho, at the start of the hearing. Crapo is chairman of the Senate Banking Committee.

Kraninger's prepared remarks called for the CFPB to be "fair and transparent" and to "empower consumers to make good choices and provide certainty for market participants." Those comments echo statements by Mulvaney, who believes the bureau's power is too unrestrained.

But Kraninger did seem to differ on some positions regarding the CFPB than her current boss.

She appeared supportive of the bureau's work when it comes to non-discrimination in financial products as well as the idea that the bureau has a role in protecting student loan borrowers. She also disagreed with the characterization of the bureau as a "sick, sad joke," a phrase Mulvaney once used to describe the bureau when he was a Congressman from South Carolina.

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Ken Sweet covers the banking industry and the Consumer Financial Protection Bureau for The Associated Press. Follow him on Twitter at @kensweet.

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